ARLINGTON MEMORIAL HOSPITAL TO PAY U.S. NEARLY $1 MILLION
TO RESOLVE ALLEGATIONS OF IMPROPER PHYSICIAN PAYMENTS

DALLAS — Arlington Memorial Hospital (AMH), located in Arlington, Texas, has agreed to pay the U.S. $990,509.50 to resolve allegations that it violated the civil False Claims Act, announced U.S. Attorney James T. Jacks of the Northern District of Texas. AMH allegedly violated the civil False Claims Act by submitting improper claims for payment to the Medicare program between July 1, 2003, and July 1, 2007, for pulmonology-related items and services. By entering into such a settlement, AMH does not admit any wrong-doing and denies liability.

In August 2007, AMH’s corporate parent self-disclosed to the Office of Inspector General for the Department of Health and Human Services (OIG) that a long-standing contract with a physician group for the interpretation of arterial blood gas (ABG) tests potentially violated federal law. The self-disclosure prompted an investigation, during which AMH cooperated fully with the government. Based upon information provided by AMH, and learned during the investigation, the U.S. alleged AMH, through its former president, paid a physician group for ABG tests even though such tests no longer required any professional interpretation. Rather than reduce the compensation, or revise the terms of the contract, AMH’s former president agreed to pay the group for uncompensated charity care and oversight of AMH’s blood gas lab, despite the fact that the contract indicated payments were for interpretation of ABG tests. Medicare ultimately paid AMH for pulmonology-related items and services referred by the group’s physicians between July 1, 2003, and July 1, 2007.

The U.S. contended that AMH knowingly failed, through the actions of its former president, to eliminate payments to the group for the interpretations of ABG tests that were not performed, and that AMH knew such payments were not in compliance with federal legal requirements.

U.S. Attorney Jacks praised the investigative efforts of the OIG. The case was handled by Assistant U.S. Attorney Sean R. McKenna.